Question

Which one of the following statements is TRUE?

Group of answer choices

When the required return is less than the internal rate of return, net present value is positive.

When the IRR is greater than the required return, the net present value is negative.

If projects are mutually exclusive, you should always select the project with the greatest IRR.

Projects with conventional cash flows have multiple internal rates of return.

Answer 1

The NPV will be positive if required rate of return is less than IRR, this statement is true

The NPV will not be negative if IRR is higher than required return, this statement is false

If projects are mutually exclusive then NPV is considered for selection,If one project NPV is higher but IRR is lower than other than choose this project, so this statement is not true that always select the project with higher IRR

The conventional cash flow has only one IRR whereas unconventional cash flow has multiple IRR, this statement is also false